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Hottest New Ideas for Reforming Public Schools come from Unusual Sources -- a Leading Business Guru and a Major Management Journal

December 1, 2005

For more information, contact: Benjamin Haimowitz,

It's a point Alan Greenspan seemingly never tires of reiterating: nothing is more important to the U.S.'s economic future than overhauling its public education.

Yet, business leaders and thinkers have largely been bystanders -- sometimes sympathetic, sometimes condescending -- when it comes to educational reform.

Now this state of affairs may be ripe for change as a result of a new approach to reform developed by a prominent management guru. The approach, says Richard Riordan, former mayor of Los Angeles, and a long-time friend of business professor William G. Ouchi of UCLA, has "provided an opening for the business community and for management engage the challenge of public-education reform as they have never done before."

Ouchi has not only become a hot item among public educators in New York, Chicago, Boston, San Francisco, St. Paul, Oakland and other places, but has caused a major stir in the Academy of Management, whose 16,000 members, mostly business faculty, make it the largest scholarly organization in the world devoted to management research and teaching. The current issue of the Academy of Management Journal is in large part devoted to Ouchi's ideas for public-education reform (a subject never before broached in the journal's 50-year history), as well as to a broader issue of much concern to the late Peter Drucker -- namely, how to apply management research beyond the business world.

"Peter Drucker was a great believer in management thinkers' engaging problems in the public sector," comments the editor of the Academy of Management Journal, Prof. Sara Rynes of the University of Iowa. "This issue of the journal seeks to strengthen that engagement."

Adds Penn State business professor Donald Hambrick, one of the scholars contributing to the journal: "Just think of all the public-sector and not-for-profit organizations that are undermanaged or mismanaged, including health care providers, municipal governments, the U.S. security establishment, and the United Nations...To be sure, the techniques of business require certain adjustments and sensitivities; but, as we see from Bill Ouchi's successes, they can work wonders."

Ouchi's impact derives from a concept so fundamental in the business world that it seems amazing it has been applied only rarely to public education -- namely, the need for executive leadership.

Says Ouchi: "One of the few things practically all educators agree on is that the principal is key to the quality of education in a school. Yet, principals are rarely given the power to exercise the leadership their position requires. In New York, principals control, on average, 6.8% of the school budget, in Los Angeles 6.7%, in Chicago 19.3%. Lacking meaningful power over the purse, principals too often become mere bureaucrats instead of the entrepreneurs they need to be."

Ouchi is well aware that such ideas, coming from a business professor, can irritate educators.

"People always accuse me of trying to turn principals into MBAs rather than instructional leaders," he recently told the business magazine Across the Board. "Well, ask any principal: What does it mean to be the instructional leader of your school? Do you control the staff? No. How about the use of teachers' aides? Well, no. How about the choice of the teachers you hire? No. Do you get to set the curriculum that would make the most sense in your school? No, I don't. Well, surely the books and materials? No, that's not really up to me. How about the bell schedule? No, we all have to be there six periods a day. How about the professional-development budget? No, the central office decides that.

"So what does it mean to be called the instructional leader?" Ouchi asks rhetorically in conclusion.

Mayor Riordan concurs that, for all the impressive headway Ouchi has made, people tend to discount the notion of business-management ideas being applied to public education. As he puts it in the current Academy of Management Journal:

"Dr. Ouchi's prescription seems obvious, doesn't it? Yet, if you made a list of people's silver bullets for public education -- smaller classes, better pay for teachers, more phonics, longer school years, no social promotions -- the concept of changing governance structure would be near the bottom of the list. None of the favorite silver bullets is going to work, though, unless principals are empowered and can in turn empower teachers and parents."

The Washington Post's senior education writer, Jay Mathews, recently acknowledged as much in a column on the paper's Web site:

"Unless forced to, I don't write about school systems," he began. "They are often too big and bureaucratic for me..."

But by the column's end, he had second thoughts: "Money is power, and most school board members and superintendents of systems where spending decisions are made at headquarters don't want to give it up. But if [Ouchi's] results hold up...they may have to [give it up]... [And] I may have to start taking school systems, and what they do, more seriously."

Prof. Ouchi's role as a public-education reformer marks the latest unusual turn in a career that began a quarter-century ago with the publication of a hugely best-selling business book that is widely recognized today as a classic on corporate management. Theory Z: How American Management Can Meet the Japanese Challenge (1981) came on the scene at a time when many people had begun to believe Japan was destined to be the world's predominant economic power. Making the case against that gathering sense of inevitability, Theory Z was published in 14 foreign editions, and is the seventh most widely held book among the 12 million titles in U.S. public libraries.

Having reached the top rank of management gurus, Prof. Ouchi made an unusual career move, when he left his faculty position to become a senior aide and then chief of staff to Mr. Riordan following his election as mayor of Los Angeles in 1993.

Equally surprising, after Ouchi returned to academe several years later, he chose to focus on a subject largely avoided by management scholars -- public education, which had first stirred his interest when he worked as a volunteer during his children's school years. Frustrated by an inability to get straight answers from the L.A. Unified School District, he recalls that he began to think, "This is a lot like some sick companies I've seen."

Raising $1 million research dollars following his return to UCLA, he embarked on a comparison of schools in nine urban school districts: 1) three districts (Houston, Seattle, and Edmonton) that give the predominant say over schools' budgets and management to their principals; 2) the three largest U.S. school districts (New York, Chicago, and Los Angeles), all of which entrust little executive power to principals; and 3) the Catholic school systems in those three largest U.S. cities, which, in contrast to the local public-school systems, do give principals true executive power.

Overall, Ouchi's team visited 223 schools, in each case interviewing the principal in depth, gathering information on student performance and how the school was managed, and touring classrooms. They also paid several visits to the headquarters of each school district, where they interviewed the chancellor or superintendent and other top officials.

The researchers found a consistent pattern: districts that gave a lot of power to principals "outperformed the centralized districts both in overall student performance and in reducing the achievement gap between racial groups."

The conclusions have been elaborated in scholarly articles as well as in a book for a general audience, Making Schools Work, published in late 2003 by Simon & Schuster. Tom Peters called it "the most important book on education in a half century."

These days Ouchi keeps busy trying to balance his research and teaching at UCLA's business school with demands for his time (which he contributes pro bono) from school districts from New York to Hawaii. He is delighted at the stir his ideas have caused in the Academy of Management, with its heavy membership of business professors, but would like to see more business leaders get involved. "Sometimes I feel like a little guy in a helmet and spear fighting Jabba the Hutt," he jokes. "I could use some help."

Media Coverage:
USA Today. Schools take a lesson from big business. (Thursday, March 09, 2006).

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